CIPC Webinars Change of Close Corporations Members Prepared

CIPC Webinars Change of Close Corporations Members Prepared by: Vuyani Nkohla

Mandate of the CIPC • Section 15(1) of the Close Corporations Act, 1984 as amended provides that • “If any change is made or occurs in respect of any matter particulars of which are stated in a founding statement of a corporation in accordance with the following: - Principal business - Full name of each member, ID number, date of birth and residential address - Size, express as a percentage, of each members interest - Particulars of members contributions The corporation shall within 28 days after the change lodge amended founding statement with the Commission”

Misconceptions Many people are of the view that appointments and resignations are done by the Commission, whereas appointment and resignation of members is the responsibility of the corporation through its members or the court may order such changes. CIPC thus effect the changes when the administrative and regulatory requirements are complied with, in order to update the records to reflect the status of the corporation. Therefore corporation through its members must ensure that our records reflect the status of the corporation by submitting Annual Returns on a yearly basis and submitting necessary forms when changes have occurred.

Types of Changes • When a member has ceased to be a member by selling his/her percentage of interest or new member is buying interest in the corporation. • When a member is deceased, and an executor responsible for the estate of the deceased will do the necessary formalities including signing for the deceased. • When there is a court order against the member whether he/she has been declare insolvent, mentally disorder otherwise incapable or incompetent to manage his affairs.

Requirements for Membership • Any natural person entitled to member’s interest • A natural or juristic person, nomine officii, who is a trustee of trust, provided no juristic person is a beneficiary of such trust • A natural or juristic person, nomine officii, appointed for the insolvent estate of the member, deceased, mentally disordered, administrator, executor, curator or legal representative duly appointed.

Member Changes– Procedure • The prescribed form must be signed by or on behalf of every member of the close corporation. • Where third party files and/or signs on behalf of the company, then the mandate or power of attorney is required. • Resolution/extract of minutes and/or any written instrument from the corporation signed by all members and those who are to become members. • Certified ID copies of members affected by the change and those mandated to file on behalf of the company

Members Change - Filing Change of CC membership process - we have manual filing where the applicant files the application by scanning the completed form and supporting to manualck 2@cipc. co. za • Another way of filing changes is via eservices and applications must be scanned to eservicesck 2@cipc. co. za and the turnaround time is 5 working days, the process works the same with director changes.

Change of Members– Filing Requirements • Applicants filing via eservices must note the size limit of 5 MB and only use PDF’s and Ti. FF’s images as required. • Ensure that documents are clear when scanned for examination purposes. • Correct email addresses must be used and when applications are sent to the incorrect address that would result in unnecessary delays. • When an application for eservices has been queried for whatever reason the applicant must capture afresh a new application in order to be issued with a new tracking number.

Change of Directors/Members– Tips • A person has to register with us first as a customer in order to file with us. • Ensure that all your prescribed forms (CK 2’s) have the customer code reflected on the first page top right hand corner of the form. • Prescribed forms must be completed in full, i. e do not only write the details of the member to be appointed or only details of the resigning member, at all times also write the details of those who are not affected by the change on the form. • Members must frequently check the status of the CC Membership within corporation with the Commission. • Regulation 168 of the Companies Act provides that a company may challenge any document filed with the Commission within 10 business days by filing a notice in Form Co. R 168, this can be followed when corporations are challenging any changes to membership without their knowledge and authority.

Administrative support • Each application must be submitted in a single e-mail with all attachments in PDF or TIFF to either: - manualcor 39@cipc. co. za for manual Co. R 39 applications - eservicescor 39@cipc. co. za for eservices applications also - manualck 2@cipc. co. za for manual CK 2 applications - eservicesck 2@cipc. co. za for eservices applications • Customers are advised to visit our website for updates, notices, guides and more information. • All enquiries must be logged via the CIPC website: www. cipc. co. za / Enquiries

Questions? Thank you